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July 2012 Policy Study, Number 12-6


Lead, Follow, or Get Out of the Way: School Choice in Iowa


Actions in 2012



In June 2012, the states of New Hampshire, Pennsylvania, and Virginia all adopted new tax-credit scholarship programs.


The New Hampshire Legislature overrode Governor John Lynch’s (Democrat) veto of the legislation passed earlier in the session to put their tax credit and scholarship program in place.[6]


Pennsylvania Governor Tom Corbett (Republican) signed legislation passed on June 30 which “creates a tax credit for corporate donations” to scholarship programs in the state’s lowest 15 percent of public schools.[7]


Virginia’s Governor Bob McDonnell (Republican) also signed legislation presented to him. Tax credits may now be taken by both individuals and corporations for donations made to a 501(c) (3) non-profit school tuition organization.


In New Hampshire, the tax credit is 85 percent of the amount donated, in Pennsylvania 75 percent, and Virginia only 65 percent. The New Hampshire and Virginia plans establish student scholarship eligibility at 300 percent of the federal poverty level, Pennsylvania at a family income of $60,000, increasing in future years to $75,000.


There is a cap of $2,500 per child in New Hampshire. Additionally, homeschooled families are eligible to receive $750 per child.[8] The Pennsylvania limit is $8,500, with a $15,000 limit for special needs students.[9]


In Virginia, the scholarship limit varies, but is the amount of money allocated by the state to the school district for each child.[10]


Earlier in 2012, Arizona expanded its existing scholarship program by including children of active U.S. military members, students in failing schools or districts, and children adopted from the foster-care programs. Previously their program was only available to special-needs children.


In Arizona, 90 percent of the state funding per child can now be deposited in an Empowerment Scholarship Account for the individual child. That money can then be spent on tuition, on-line courses, tutoring, textbooks, or even future college costs. There is no income limit. This change makes over 230,000 children eligible to attend the school of their parents’ choice.[11]


The tax credit amount for private school scholarship donations from individuals and corporations was also increased in both Arizona and Florida. These limits are now $26 million and $140 million respectively.


Earlier this summer, the Louisiana program was expanded to one of the largest nationally when Governor Bobby Jindal (Republican) signed legislation extending vouchers from the New Orleans district and special needs students, to all low- and middle-income students statewide who are in schools receiving a “C” or lower on the state accountability score.[12]


The bill passed both houses of the Louisiana Legislature by 60 percent. Louisiana used to be known as having one of the worst government-school systems in the country, but is now a leader in personal responsibility and accountability.


The following two tables outline the key points of both state scholarship (voucher) programs and tax credit programs nationwide.



Currently, state scholarship and tax credit programs similar to those outlined above are the major components of most Legislative school-choice actions.


They are fairly easy to implement and manage, and are understandable by parents, business owners, and taxpayers. Additionally, both programs make it easy for those who are not parents of school-age children, but who support school-choice options, to participate. By donating to non-profit organizations, they provide parents with financial support for their school choice and they receive tax credits personally.


Importantly, the donations and awarding of scholarships are not controlled by the state education departments, but initiated by the taxpayer/corporation and credited through the tax and revenue departments based on clear-cut standards.


In a similar manner, the scholarships are awarded to children by the non-profit scholarship organizations, with clear economic eligibility standards for making the decisions.


Neither school administrators nor teachers’ unions have a role in determining eligibility of the student. And they have no role in determining which school is best for the individual child. That is the parents’ decision — people who know the child and have the ultimate vested interest in seeing them learn and succeed.




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